Here is selected data for Lorelei Corporation:
Cost of raw material purchased | $75,000 |
Cost of requisitioned direct materials | 41,000 |
Cost of requisitioned indirect materials | 2,000 |
Direct labour | 75,000 |
Manufacturing overhead incurred | 95,000 |
Cost of goods completed | 226,750 |
Cost of goods sold | 138,000 |
Beginning raw materials inventory | 15,000 |
Beginning work in process inventory | 32,000 |
Beginning finished goods inventory | 31,000 |
Manufacturing overhead allocation rate (based on direct labour) | 125% |
At Lorelei Corporation the journal entry to close manufacturing overhead would include a
◦ credit to manufacturing overhead for $1,250.
◦ debit to manufacturing overhead for $1,250.
◦ credit to manufacturing overhead for $1,450.
◦ credit to cost of goods sold for $1,250.